For step 4 above, is it the RSI need to touch the 80 level (downtrend) when forming the divergence?
YES and NO : Let me explain. RSI needs to touch or cross above 80 in step 3. In step 4 RSI just needs to be lower than the last apex of RSI.
Example: RSI goes up to 88 in step 3 with market price at 1.2750 on the 1m chart.
Step 4: 4 - 10 candles later on 1m chart RSI is at 81 and market price is 1.2759. This is a divergence !! You follow RSI direction which, in this case is down even though it is still above 80.
How about if the divergence do not form after the 10 candle from the last apex?
Is it we go back to 5m chart and wait for the next touch or continue to find the
divergence on 1m chart?
If RSI is hanging around 80 in the 1m chart then RSI is doing the same on the 5m chart. I would just keep an eye on it and wait for a divergence to form. If market price moves down and breaks structure without forming a divergence then I never took the trade. A divergence does not form every time a low or high is hit in market price.
I am two days new to forex and going through the babypips school now. I saw this and it caught my eye. It really looks greek to me but I I would like to learn this as well as ICT’s stuff.
I have a few questions.
What brokers are suggested here in order to trade these binary options?
What trading software is used? MT4, Tradestation or some other software?
Hi Pipster,
The only broker I would suggest is “24 Options”. I use their platform to place the trades but I run MT4 at the same time so I know when to take a trade. I have set up a few indicators that I designed for Binary Option trading.
Go back and read “Rules of Engagement”. All the indicators are standard with special settings for trading options.
If you are that new to Forex, welcome. There is a lot to learn but it can be very rewarding just don’t fall for the hype that’s out there.
Any questions just ask. We are here to help each other.
I was talking with some of the other people here at babypips and the consensus is binary is bad. I can see here that you don’t share their point of view. I have a friend who introduced me to this website and Forex who is a big follower of the inner circle trader and his trading concepts. I haven’t read everything he has posted here “this is my third day in the Forex world” I would be interested in knowing though. Thanks for the broker info. It is appreciated very much.
Either way I am very excited about Forex and am looking forward to one day having the knowledge that you older traders have.
I alrdy try your system yesterday for asia and london sesson for ten currency pair. I only get the two entry opportunity. The results is one win one loose. Is it normal it do not have much entry opportunity？
Hi Pipster,
Binary Options is a very specialized version of trading Forex. I like it because you win or lose in 10 to 25 min. It requires a specialized set of indicators but it can be very profitable. I still trade Forex on the MT4 platform but I look for a longer term trading chart (4hr to daily) and Binary Options does fill the void in the trading day.
Good Luck
Jim S.
Using a diversion system of trading works best when liquidity is high. The New York session is what I use. But I have used the system when liquidity is low and I have found it is not nessary to wait for the diversion to form. Look at the history in the 5m and 15m chart. If diversions are not there than trade strait RSI.
Good Luck
Jim
Yes, once RSI has touched on 5m chart and 1m chart, during low liquidity, you can take a trade providing it is with the trend. Look at recent history of market price to see if diversions have been forming.
I alrdy try your system yesterday for asia and london sesson for ten currency pair. I only get the two entry opportunity. The results is one win one loose. Is it normal it do not have much entry opportunity？
The first 4-7 hours of trading, when the markets first open, are low liquidity.
Never use real money on any system till you have tried it out or have found enough history to give you confidence in the system.
Check your RSI settings. Period 7, Apply to : Typical Price (HLC/3)
I went back through the Asia & London session through the 8 currency pairs I trade and counted more than 20 opportunities on the 5m chart.
I still trying your system, but it look great so far. I hope can master your system in short time and start making money. Anyway, thank you for your explanation. <[email protected]> is my email and hope can keep in touch.
Just saw your posts, I am a massive binaries fan. I use them a lot whilst trading my own book.
I use two companies both UK based as I’m in Europe one is a tailored towards the betting market the other is a regulated financial institution so I have safety of funds and have a lot more money deposited with them
IGindex binary bets is a platform I use to speculate small amounts on.
PYXmarkets I hold larger cash and trade larger clips as this gives me the ability to build the trade I want for the return I want, upto 2000% per day.
I’m happy this system is working for you. Just remember, It is better to miss a good trade than take a bad one.
I have started using this system as a scalper as well. Scalping is not the type of trading I do. I have always been a long term tech. trader with trades lasting about 24 to 48 hours however this scalping system has given me a way to make pips while I wait for the larger trades to set up.
Sorry, another question.
I found out that when the line of zigzag indicator already point the apex (lets assume down) candle, if the price continue to moving down after a few candle, the zigzag line will re-point. If I strait enter the trade when the first apex candle form, then it will be a lose trade. You get what I means? Do you have any solution for this?
Hi Samneos,
No, I have never tried to alter the settings with Zig Zag.
By the way, I started using this system to scalp the market on the 5m and 15m charts. It seems to work very well so far. It’s good for grabbing 20 - 35 pips and I use a 12 pip stop loss. So far it has been running at a 88% win rate. 35 trades and only 4 losing ones.
Good luck & trade what you see.
Jim
I already trade Forex for around 2 years and loss a lot of money. I will continue later but at this moment, I want to concentrate on binary option and hope can success like you. As you know, I only trade Asia and London session. I do not looking for divergence to enter the trade (as you mention before because of the low volatile). The big problem I found is the zigzag always give me the false signal (apex candle) to enter the trade and lead to lose trade. I already avoid the apex lead candle. Is it any advice?
If you find that you are having a lot of losing trades try looking for the RSI divertion on the 5m chart to set up. Also, try adding CCI to your chart setting period to 23. This will give you a third indicator to look for a divertion on.
CCI will show a divergence as well as RSI but there is no other indicator that I know of to tell me when you have the apex candle. Watch the indicators to let you know when to get in. Trade what you see.